Crypto Community Experts Analyze The State Of Stablecoins And Share Opinions On Their Utility
Taking A Look At A Few Expert Opinions On Stablecoins
Stablecoins are cryptocurrencies designed to minimize the effects of price volatility. To minimize volatility the value of a stablecoin can be pegged to a currency, or to exchange-traded commodities (such as precious metals or industrial metals). Stablecoins backed by currencies or commodities directly are said to be centralized, whereas those leveraging other cryptocurrencies are referred to as decentralized.
Since its inception, they have divided the crypto community. Gabriel Cardona, Roger Ver, Miko Matsumura, and Vin Armani; who are four prominent figures in the crypto community, gave their opinions on stablecoins in an interview with Matt Aaron of Bitcoin.com.
BCH developer Gabriel Cardona thinks that 2019 will be the year stablecoins finally blossom. He stated:
“I think stablecoins are completely radical and I know there are some very smart people out there who are naysayers and say it is impossible to have a stablecoin. I suspect it is possible although I’m not going to probably be the person to design it – but my intuition tells me that it will be possible to have some kind of stablecoin that works most of the time for most use cases.”
The CEO of Bitcoin.com, Roger Ver also share the same opinion. He adds:
“I think we’ll see a lot more people using stablecoins. It seems pretty clear that the market is headed in that direction at the moment.”
Vin Armani, founder of Cointext views this issue through the lenses of institutional investors. He thinks that institutional investors view stablecoins as a hedge against volatility in crypto prices. They want something that feels familiar, and so stablecoins present that. It’s a way to bring in institutional investors.
Co-founder of Evercoin and GP of Gumi Cryptos venture fund, Miko Matsumura, thinks that how people view stablecoins will substantially change in the near future. He added:
“The point I will make is stablecoins will continue to exist but we will think of them more as payment coins, we will think of them as e-commerce coins or kinds of baskets of asset-backed security-like mutual funds – we’ll think of them differently from the way we think of them today.”
If stablecoins can prove themselves, an entirely new wave of crypto-related investment is likely to be unleashed. Not only will more service providers and partners enter the eco-system to support crypto-native startups, but institutional investors and large enterprises who want to manage cash flows with some degree of predictability will get comfortable with larger stakes. In addition, projects that raise funds via ICO will have the opportunity to mitigate volatility risk of their assets and do more effective long-term planning, increasing their odds of success.